Wrapped HBAR
Crypto Overview
Understanding WHBAR and Its Utility
Wrapped HBAR (WHBAR) is an ERC-20 token that represents HBAR, the native cryptocurrency of the Hedera network, on the Ethereum blockchain. Its primary purpose is to enable HBAR holders to participate in the Ethereum DeFi ecosystem while maintaining their HBAR position. Each WHBAR token is backed 1:1 by HBAR held in custody.
Intended and Actual Utility
The primary use case for WHBAR is to bring Hedera's value into Ethereum's ecosystem, enabling interoperability between the two networks. This allows HBAR holders to access Ethereum's decentralized applications while maintaining their investment in the Hedera network. The actual usage aligns well with this intended purpose, as evidenced by active trading volumes and integration with various DeFi protocols.
Token Distribution and Governance
WHBAR is created through a wrapping process where HBAR tokens are locked in a custody solution, and equivalent WHBAR tokens are minted on Ethereum. The process is transparent and verifiable on both blockchains. The token supply directly corresponds to the amount of HBAR locked in custody, making it impossible for founders to manipulate the supply for personal gain.
Technical Implementation
The wrapping mechanism is based on established standards used by other wrapped tokens like WBTC. The smart contracts have been audited, and the custody solution implements proper security measures. The technology does not involve interest-bearing mechanisms or other potentially non-compliant features.
Real World Implementation
WHBAR is actively used in various DeFi protocols on Ethereum, serving its intended purpose of bringing Hedera's value to the Ethereum ecosystem. The project maintains transparent documentation and regular updates about the amount of HBAR in custody and WHBAR in circulation.
Crypto Impact
To assign a comfort level investing in Wrapped HBAR from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to Wrapped HBAR.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
We will review your contribution for accuracy before publication.
Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
You only have one vote per asset so use it wisely.
You can change your vote if you change your mind.